Interior’s new oil-and gas-leasing roadmap sidesteps climate action

The report leaves the door open for new leases on public land. What does that mean for the West?

 

Oil and gas infrastructure on BLM land in Kern County, California.
Courtesy of Bureau of Land Management

On the Friday after Thanksgiving — a day the federal government notoriously reserves for dropping politically inexpedient information — activists were blindsided by a long-anticipated report from the U.S. Department of the Interior. The document was a review of the agency’s oil and gas leasing program, which manages fossil fuel extraction on federal public lands and waters.

Climate activists were hopeful that the Biden administration would recommend a wholesale ban on new federal oil and gas leasing. But while the report proposes a substantial overhaul of the leasing system, many environmentalists viewed it as weak on climate action. They believe that Interior’s recommendations signaled an unwillingness to take bold steps to address the urgency of the climate crisis. 

“We’re sympathetic to the political gantlet the Biden administration must run,” said Erik Schlenker-Goodrich, executive director of the Western Environmental Law Center, in a statement. “But it had a choice to run it with power, speed and agility. Instead, it’s running that gantlet weak, slow, and tentative.”  

Rather than call for a halt on new oil and gas leasing, the report focused on increasing royalty rates on new leases, said Jeremy Nichols, director of the climate and energy program at WildEarth Guardians. “The fact that it applies to new leases signals new oil and gas development,” he said. “The department seems to be signaling that it wants to do everything it can to keep the oil and gas industry going. That is not a climate solution.”

Oil and gas drilling sites on BLM land near Bisti De-Na-Zin Wilderness, New Mexico.
Courtesy of EcoFlight

Changing the royalty rate would, however, benefit Western states. New Mexico and Wyoming hold over half the program's leases and together take in well over a billion dollars a year from combined royalties — the revenue shares paid to state governments by oil and gas companies. The money helps fund schools, roads and other public goods. But royalties are incredibly volatile and exist at the whim of a boom-and-bust industry. Onshore oil and gas companies currently pay a 12.5% royalty rate — a figure set more than a century ago. The report notes that many oil-producing states and private landowners require much higher rates, up to 25% in some cases.  

The Interior Department also recommends addressing the root financial cause of so-called “orphaned wells” on public land. When oil and gas companies go bankrupt, they often liquidate their assets, an act that can result in wells becoming abandoned. When that happens, the cost of cleanup falls on taxpayers. According to a report by the Western Wildlife Federation, in 2018 there were 8,050 inactive wells “orphaned or at risk of being orphaned on federal lands” across five Western states.  

To solve this problem, the Interior Department argued that “bonding levels” — the amount of money companies pay up front to cover future cleanups — need to be raised to pay for these wells before they are abandoned. The current leasing system allows companies to purchase what are known as blanket bonds, in which a single bond covers a large number of wells. That allows a company to buy one $25,000 bond to cover all of its wells in a single state, or a $150,000 bond to cover all the wells it operates on public lands across the country. The problem with this model is that the average cleanup cost for a single orphaned well can run anywhere from $20,000 to $145,000, according to a Government Accountability Office report. 

“There’s an unwillingness for them to own the issue and play a role in confronting the climate crisis.”

Conservationists and environmental activists welcome these recommended reforms, said Nichols, but Westerners are already paying increasing amounts for climate inaction as wildfires, floods and drought worsen. “It seems like this administration is cowering,” he said. “There’s an unwillingness for them to own the issue and play a role in confronting the climate crisis.”

Theo Whitcomb is an editorial intern at High Country News. We welcome reader letters. Email him at [email protected] or submit a letter to the editor. See our letters to the editor policy.

High Country News Classifieds
  • NORTHERN NEW MEXICO PROJECT MANAGER
    New Mexico Land Conservancy is seeking a qualified Northern New Mexico Project Manager to provide expertise, leadership and support to the organization by planning, cultivating,...
  • GRAPHIC AND DIGITAL DESIGNER
    Application deadline: December 17, 2022 Expected start date: January 16, 2023 Location: Amazon Watch headquarters in Oakland, CA Amazon Watch is a dynamic nonprofit organization...
  • EXECUTIVE DIRECTOR
    Eugene, Ore. nonprofit Long Tom Watershed Council is seeking a highly collaborative individual to lead a talented, dedicated team of professionals. Full-time: $77,000 - $90,000...
  • GIS SPECIALIST
    What We Can Achieve Together: The GIS Specialist provides technical and scientific support for Geographic Information System (GIS) technology, data management, and visualization internally and...
  • LOWER SAN PEDRO PROGRAM MANAGER
    What We Can Achieve Together: The Lower San Pedro Program Manager directs some or all aspects of protection, science, stewardship and community relations for the...
  • FOREST RESTORATION SPATIAL DATA MANAGER
    What We Can Achieve Together: The Forest Restoration Spatial Data Manager fills an integral role in leading the design and development of, as well as...
  • WATER PROJECTS MANAGER, SOUTHERN AZ
    What We Can Achieve Together: Working hybrid in Tucson, AZ or remote from Sierra Vista, AZ or other southern Arizona locations, the Water Projects Manager,...
  • SENIOR STAFF THERAPIST/PSYCHOLOGIST: NATIVE AMERICAN STUDENT SPECIALIST
    Counseling Services is a department strategically integrated with Health Services within the Division of Student Services and Enrollment Management. Our Mission at the Counseling Center...
  • THE NATURE CONSERVANCY IS HIRING A LOCAL INITIATIVES COORDINATOR
    The Nature Conservancy in Wyoming seeks a Local Initiatives Coordinator to join our team. We're looking for a great communicator to develop, manage and advance...
  • LAND AND WATER PROTECTION MANAGER - NORTHERN ARIZONA
    We're Looking for You: Are you looking for a career to help people and nature? Guided by science, TNC creates innovative, on-the-ground solutions to our...
  • SENIOR CLIMATE CONSERVATION ASSOCIATE
    The Greater Yellowstone Coalition (GYC) seeks a Senior Climate Conservation Associate (SCCA) to play a key role in major campaigns to protect the lands, waters,...
  • EXECUTIVE DIRECTOR
    The Southern Nevada Conservancy Board of Directors announces an outstanding opportunity for a creative leader to continue building this organization. SNC proudly supports Nevada's public...
  • CORTEZ COLORADO LOT FOR SALE
    Historic tree-lined Montezuma Ave. Zoned Neighborhood Business. Build your dream house or business right in the heart of town. $74,000. Southwest Realty
  • ENVIRONMENTAL AND CONSTRUCTION GEOPHYSICS
    - We find groundwater, buried debris and assist with new construction projects for a fraction of drilling costs.
  • STRAWBALE HOME BESIDE MONTEZUMA WELL NAT'L MONUMENT
    Straw Bale Home beside Montezuma Well National Monument. Our property looks out at Arizona fabled Mogollon Rim and is a short walk to perennial Beaver...
  • ATTORNEY AD
    Criminal Defense, Code Enforcement, Water Rights, Mental Health Defense, Resentencing.
  • LUNATEC HYDRATION SPRAY BOTTLE
    A must for campers and outdoor enthusiasts. Cools, cleans and hydrates with mist, stream and shower patterns. Hundreds of uses.
  • LUNATEC ODOR-FREE DISHCLOTHS
    are a must try. They stay odor-free, dry fast, are durable and don't require machine washing. Try today.
  • PROFESSIONAL GIS SERVICES
    Custom Geospatial Solutions is available for all of your GIS needs. Affordable, flexible and accurate data visualization and analysis for any sized project.
  • A CHILDREN'S BOOK FOR THE CLIMATE CRISIS!!
    "Goodnight Fossil Fuels!" is a an engaging, beautiful, factual and somewhat silly picture book by a climate scientist and a climate artist, both based in...